The gold price dipped in early trade today (Monday October 3), as economic turmoil in the markets calmed down.
Investors had been heading to bullion as a safe haven amid concerns about Deutsche Bank, which is negotiating with authorities in the US over the level of its fine after it was found to have mis-sold mortgage-backed securities.
But Jeffrey Halley, senior market analyst at OANDA, told Reuters that “everything seems to have calmed down substantially including Deutsche Bank and OPEC production cuts,” so that gold is less attractive to investors.
On Monday at 09.00, gold was valued at £1,024.11 per troy ounce.
It’s likely that there will be no great rally in the gold price this week, because the biggest buyer – China – will not be involved in trade. The Chinese markets are closed until October 9 for National Day Holidays.
HSBC analyst James Steel said in a note: “We see no major investor enthusiasm for gold and prices may have to ease.
“Gold's best near-term chance of a rally would more likely come from an oil surge or a deterioration of the financial situation in Europe.”
There are currently mixed signs coming from the US which have made it more difficult to call whether the US Federal Reserve will raise interest rates at its next meeting. Although US consumer spending was down, there were also signs that inflation may be picking up.
